Stocks At Or Near Bull Market Highs

By Eric Fox | October 23, 2009 AAA

The Dow Jones Industrial Average (DJIA) recently breached the 10,000 level, empowering long-only investors, and representing a powerful 50% move off the lows reached in March 2009. While the overall market is far below its peaks, the list of stocks that are near or higher than the bull market peak of 2007 continues to grow.
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Unfortunately for investors, the DJIA still has a long way to go until it can even get close to its peak above 14,000 reached in 2007. One market observer has calculated that if the DJIA continues to increase at this rate, it will pass the 14,000 level sometime around May 2010.

Despite this seemingly insurmountable goal, many stocks are trading close to or above the highs reached at the top of the bull market in 2007. These stocks have ignored the general market and moved on their own fundamentals.

Peaking Tech Stocks
Apple Computer
(NYSE:AAPL) reached its bull market high earlier this week after the company reported its fourth quarter fiscal 2009 earnings. The company's innovative new products seem to keep its businesses recession resistant. Apple Computer stock bottomed multiple times near $80 a share in the fall of 2008 and spring of 2009, and investors were rewarded with a return of 150% if they picked the bottom.

Other technology stocks getting close to breaking out are IBM (NYSE:IBM), Oracle (Nasdaq:ORCL) and Hewlett Packard (NYSE:HPQ). All three are within a few percent of breaking through to new highs.

One technology stock that has already breached its bull market high and left the rest of the market behind is Priceline.com Inc. (NYSE:PCLN). The stock has strong earnings momentum and has beaten earnings per share guidance for four straight quarters. Priceline.com needs a lot more to reach the highs of the technology bull market of the last decade, where the stock peaked at more than $1000 per share.

Retail Winner
On the retail side, TJX Companies (NYSE:TJX) is another winner. The company just reported its quarter and blew through estimates, and raised guidance for 2010.

Energy High
Most energy stocks remain well below the oil bubble highs reached several years back. Southwestern Energy (NYSE:SWN) is one of the few trading at just about its peak price reached at that time. This company pioneered the Fayetteville shale play, and is set to grow production by 45% in 2009, despite a large cutback in drilling. (For a primer on the oil industry, refer to our Oil and Gas Industry Primer.)

The Bottom Line
There are some stocks that are trading at lifetime highs despite the dismal performance of the DJIA. This proves once again that stock picking matters and alpha can be added by those who do research, and don't hide behind the index.

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